Will Weight Watchers benefit from 'Oprah Effect'?

Oprah Winfrey
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"The Oprah Winfrey Show" may have gone off air in 2011, but Oprah Winfrey still remains an iconic media mogul who has an unprecedented ability to the boost the presence of companies affiliated with her.

Wall Street still believes in "The Oprah Effect." In response to the announcement that Winfrey was investing in Weight Watchers, the company's stock jumped more than 118 percent by Monday afternoon.

"When you are a consumer and you see her starting a network or starting a magazine, people know it's coming from the purest, most authentic place as a person," said Erik Logan, president of Oprah Winfrey Network (OWN). "Therein lies the power of her brand that has stood for three decades."

According to Reuters, Winfrey bought a 10 percent stake in Weight Watchers, or about 6.4 million shares at Friday's closing price of $6.79 a share, a total of $43.4 million. She has the option to buy an additional 5 percent stake. Winfrey will also help further the company's health and wellness initiatives, both through joining the program herself and becoming a board member and advisor to the company. Weight Watchers didn't respond to requests for comment.

Logan pointed out that Winfrey's history of talking about her weight struggles only made the Weight Watchers deal make more sense.

"One of the core words of her brand is authenticity," he said. "She's doing this from a place of authenticity. She's engaged her lifelong battle with weight, and she knows she's not the only one."

Even though Winfrey has a net worth of $3 billion, her candid nature still makes her accessible to the mainstream public and a valuable marketing tool.

"Unlike other brands like Apple or Starbucks, those brands are not people," Logan said. "Those brands are symbols, and have an identity that has been built by individuals. We have a huge advantage (with Oprah's brand) because Oprah feels from her heart where she wants to be. That allows us the ability to create opportunities to connect with people."

That's exactly what branding experts say Weight Watchers and investors are hoping to tap into. As Weight Watchers attempts to shift into a trendy healthy lifestyle focus from a passe dieting service, it will need someone relatable to help usher its new direction.

"Her brand has always been about empathy, and recently it's been really kind of focused on spirituality and self-help," said Geoff Cook, founder and partner of branding agency Base Design N.Y. "Her target audience is really about that, and they're in their late 40s, which is about Weight Watcher's sweet spot."

Julia Beardwood, founding partner of branding agency Beardwood & Co., said part of Weight Watchers struggle is that competing digital free services like MyFitnessPal and Spark People create easily accessible, online dieting-focused communities. However, having Winfrey vouch for the effectiveness of taking the time out of your day to attend might be able to help persuade the public to pay for the service.

"What Weight Watchers still has is that in-person meeting, which is inconvenient for those of us running around," Beardwood said. "But, it is also the ultimate in accountability and community, which is also the two areas where Oprah is really strong in."

During Winfrey's talk show days, when Beardwood asked her company clients to name their dream representative, the most commonly uttered name was Oprah (followed by Nelson Mandela). While she conceded that Oprah's brand isn't as strong as when she was on TV daily, Beardwood still believes Winfrey is unusually distinctive in her ability to draw public interest.

"She combines a level of humanity, empathy and ability to connect, along with a level of entertainment and on some level, glamour. … Sort of in the same level as Donald Trump, she speaks the truth, or her version of the truth. You don't feel like you're going to get bulls---- with Oprah," Beardwood said.

CNBC update: Oprah takes 10% stake in Weight Watchers

Talent Resources CEO Michael Heller added that despite not having her talk show soapbox, Oprah has amassed a large social media following. She has a little over 29 million followers on Twitter, while her Instagram has 4.2 million followers.

While Winfrey's core audience is getting older, Heller said she's doing an excellent job at staying current with digital trends, which means she still has some relevance for a younger audience. That could also be good news for Weight Watchers if it is looking to expand to new generations of clients.

"With Oprah and this specific deal, there's so many opportunities for content creation and cross collaborations," Heller said. "In this new world where the script has really been flipped, the individual influencer rather than the influence of the companies is driving the consumer interactions. These celebrities are walking networks."